The Colombian economy has been characterized by its dependence on commodities, particularly mining and oil and gas, as the main contributors to its GDP. As a consequence, deindustrialization (i.e., of secondary goods) has been empowered and, as far as services (i.e., tertiary goods) are concerned, progress has been timid. In this regard, the country is worthy of disruptive changes that lead to a balance in the generation of its domestic production and the putting aside of its dependence on raw materials as the main generator of inputs into the national budget.
To make national production more competitive, not only for domestic consumption but also for the international market, it is necessary for the country to build a freight transportation network that is cost-efficient for producers. This is why the rail freight sector emerges as one of the sustainable solutions, not only in terms of competitiveness for domestic production but also as an attractive option for long-term investors who contribute to the creation of employment. Railway transportation will be the backbone of the multimodal system that will reduce freight movement costs at a ratio of 4 to 1. Today, the railway subsector lacks organic laws, a clear business model, and a multimodal strategic plan. This paper aims to propose a comprehensive regulatory framework in which the railway is the main element of the transportation system, based on a more efficient and effective business model and within the framework of public-private alliances (PPA), an arrangement that has not been used in the past.
The aim of this document is to provide an integral and practical tool for future decision-making in the Colombian rail freight sector that helps it to adjust to market situations without losing its way, especially in a sector that has a high impact on economic growth and is interdependent on other means of transport.
The Colombian railway transport sector has competitive advantages that should be exploited for the economic development of the country. Once a recovery plan for the current
railways is implemented and it is interconnected with other transportation alternatives, from a commercialization point of view, intermodal transportation in Colombia will offer advantages to producers who will be able to lower their pricing for exporting purposes and to compete in the local market. The acquisition of the latest and environmentally friendly technology will generate not only sustainability but also render opportunities to reduce tax rates and to take advantage of tax incentives provided by the Government for the use of advanced technologies. The development of laws and regulations for the sector, where public-private investment is promoted, will be advantageous for the financing of infrastructure projects in the Colombian freight railway sector. Such legislation should promote investment from financial institutions, especially from pension fund managers. Horizontal integration with other transport modes will allows not only economic development of the Colombian Rail Freight sector, but also will support other in-country freight and passenger transportation sectors that are necessary for the continuous improvement of production prices and to facilitate mobility of citizens in Colombia.
In order to develop these competitive advantages, five long-term goals have been proposed: (a) To establish a legal and regulatory framework of public policy for the Colombian Rail Freight Sector in accordance with international standards ALAF, UIC, COTIF and OTIF. As of 2014, this framework is nonexistent; (b) for the Colombian Rail Freight Sector to mobilize 120 million tons of freight in the international market by the year 2030. In 2014 it mobilized 43 million tons; (c) to have the public-private alliances invest US$67.8 million into the rehabilitation, recovery and construction of double track standard gauge railways in the Colombian rail system, between the years 2015 and 2030. In 2014, US$212 million was invested; (d) to reduce by 40% of the environmental impact of CO2 emissions generated by the Colombian Rail Freight Sector by the year 2030. Its emissions in 2014 accounted for 14% of total CO2 emissions (Legicomex.com, 2013); and (e) to have the Rail Freight Sector in Colombia allocate 1% of total investments to improving the quality of
life of families located in the vicinity of the railways by 2030. In 2014 no resources were allocated.
The implementation of the nine retained competitive advantage strategies will strengthen the competitive advantages of the rail freight sector, and will attract not only private investors (i.e., foreign or local), but also public investment. Public-private partnerships will also empower the sector and thus generate disruptive economic development that will help better balance production that today is highly dependent on raw materials and oil and gas